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Identifying Your Best Planned Giving Prospects:It Helps To Know Where to Look
Lawrence C. Henze, J.D.Managing DirectorTarget Analytics
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Your Presenter
Managing Director, Target Analytics Law degree, University of Wisconsin-Madison 13 years as a development officer
– Chief Development Officer, Dir. of Planned Giving
15 years as a nonprofit marketing/predictive modeling consultant– Econometrics (co-founder)– Noel Levitz– Core Data (founder)– Target Analytics (formerly Blackbaud Analytics)
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Our Agenda
Planned Giving as part of the giving process Donor Development and Planned Giving Myths Planned Giving profiles A brief look at planned giving marketing
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Planned Giving as Part of the Development Process Eliminating the Silo Approach
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Planned Giving as Part of the Development Process
Life on the farm– Think “free range”, not pens or silos
Ultimate giving is both a journey and a destination
Making the journey borderless encourages donor development
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Eliminating the Silo Approach
Do you have an integrated plan? Have you investigated opportunities for using
communication and donor relations efforts for multiple purposes?
Do you reward team efforts? Do you encourage “out-of-the-box” thinking?
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Success: The Peaceful, Integrated Fundraising Farm
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Remember…
Perception is reality– Planned giving is a major gift
Donor-centered is not a staff interpretation– Get acquainted with your donors
“We have always done it this way” is not necessarily a statement of strength
A Little Bit of Knowledge
What you know about planned giving prospects will increase your marketing effectiveness
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The Donor PyramidLoyal Donors and
Ultimate Giving
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Donor Profiling
High likelihood and high-level gift potential
Major and capital giving prospects
Planned giving potential is secondary but viable
Lower likelihood but high-level gift potential
Need to be sold on your mission
Longer term cultivation Second-tier solicitation
strategy
High likelihood and low to mid-level giving potential
Annual giving upgrade Consistent annual giving Planned giving as a
primary strategy
Low likelihood and low-level gift potential
Minimize investment Consider reduced
resource application
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Ultimate Giving
Every individual has an “ultimate gift” Ultimate gifts may be any level, any type
(including $0) Find ultimate giving profiles, develop
appropriate marketing strategies, close more gifts!
Ultimate gift a better term than planned or major gift?
Still true after all these years: most bequest and annuity prospects will never consider a major outright gift
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The Relationships Between Donor Types
Is annual giving the basis of:– Major giving success?– Capital campaign success?– Planned giving success?
Therefore, do we underestimate the value of the $20 annual donor?– Do we over-solicit these individuals?– Do we recognize their loyalty?
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What We Know About Donor Types
Within an organization:– Annual and major profiles differ– Major and planned giving profiles differ
Among all nonprofits– Annual and major giving profiles vary
• Type, location, solicitation style– However, planned giving profiles are very
consistent• Lifestyle behavior• Use this consistency to your advantage
Planned Giving Profiles
Do-it-yourself Options
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What Are My Options?
Do It Yourself– Data mining– In-house modeling
Prospect Screening/Vendor Options– Generic Modeling– Wealth Identification– Custom Modeling
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Types of Data
Types of Institutional Data– Demographic– Giving History– Activities/Relationships– Transactional– Attitudinal– Interests
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Whetting Your Appetite
Study the relationship between giving longevity and ultimate giving
Alternatively, the relationship between giving levels and ultimate major giving behavior
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Satisfy the Craving for Knowledge
Create a file of major donors using number of years giving (prior to first major gift)– 20 donors, range from 2 to 18 years
Plot data using Excel Study AND interpret the trends
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Major Giving Analysis
Years Given Prior to MG
024
68
101214
161820
1 3 5 7 9 11 13 15 17 19
Years Given Prior toMG
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What Did We Learn?
Findings– For example, major donors make an average of
9 annual gifts prior to reaching major donor status (also check mode or median)
– Establish a threshold, such as 6 annual gifts, to identify potential MG prospects
– Also study planned giving behavior and its correlation with loyal annual giving
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What Did We Learn?
Conclusion: A significant number of major donors exhibit “trigger point” behavior
You are “growing your own” major donors When donors activate these trigger points, they
appear on your major donor radar screen This is proactive data mining
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What Did We Learn?
And what do we do with this information? Assume the following:
– A major gift equals $5,000+– For 60% of the file of major donors, their last
gift before $5,000+ was $2,000– For 70% of those individuals, their last gift
before $2,000 was $500
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Beginning Level
Time-of-Year Giving– Create a pool of all donors over the past 10
years– Create a subset of donors giving in at least 6 of
the 10 years– Plot the months/quarters of their gifts– Identify the habitual donors
Why is This Important?– Ultimate giving– Cost savings
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Beginning Level – Age Analysis
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Age and Planned Giving
Planned Giving Profiles
Using History to Ensure Your Future
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Planned Giving Facts
Bequests constitute almost 90% of all planned gifts made– More than 80% of these are unknown at
present Annuities constitute another 5-6% of all planned
gifts You can have a successful planned giving
program without focusing on trusts (the complicated stuff!)
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Planned Giving Facts
You may have more dollar potential in planned giving than major giving
Why people give (NCPG survey)– 97% say they care about the charity– 87% desire to do something special– 35% tax planning– 22% know charity’s representative
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Planned Giving Facts
We often consider planned giving to be a second-tier strategy
Extremely passive solicitation methods Appeals are broad based and require request for
more information Expectations are unreasonably low
– 1% response rate to planned giving mailings
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Planned Giving Propensity
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Planned Giving by Gift Type
Each “type” has different traits– Annuities– Charitable remainder trusts– Bequests
The two faces of bequests
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Variables and Planned Gift Types?
Age? Wealth? Credit Usage? Past Giving Behavior? Type of Organization? Relationship to Organization? Marital Status? Volunteering and other loyalty measures?
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Summary and Questions
Contact me:Lawrence HenzeLawrence.Henze@Blackbaud.com843-991-9921
White Papers: http://www.blackbaud.com/resources/white-papers.aspx
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